South African employers are targeting pay rises of 6.1% in 2023 to compete for staff in a challenging job market and high inflation. That increase is slightly higher than the 5.9% increase in salary budgets in 2022, but bodes well for people looking for jobs in a variety of fields. According to a study by WTW, a global consulting, placement and solutions company, local employers plan to increase their salary budgets to attract and retain employees. The latest Salary Budget Planning Report, which received 423 responses in South Africa, found that nearly four in ten (38%) companies reported their salary budget…
South African employers are targeting pay rises of 6.1% in 2023 to compete for staff in a challenging job market and high inflation. That increase is slightly higher than the 5.9% increase in salary budgets in 2022, but bodes well for people looking for jobs in a variety of fields.
According to a study by WTW, a global consulting, placement and solutions company, local employers plan to increase their salary budgets to attract and retain employees.
The most recent Salary Budget Planning Report, which received 423 responses in South Africa, found that nearly four in ten (38%) companies said their 2023 salary budget is larger than they thought.
The Salary Budget Planning Report is a global study of salary budgets and recruitment compiled by WTW’s Reward Data Intelligence practice. The survey was conducted in November 2022 and received approximately 32,908 responses from companies in 159 countries worldwide.
According to Melanie Trollip, Director of Works and Rewards at WTW South Africa, employers are increasing their payroll budgets for three main reasons, namely inflation concerns (78%), their response to a challenging job market (37%) and improving retention of existing employees (30%). ).
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Salary increases just below inflation
However, projected wage increases for this year are slightly below inflation, which is normal in tough economic times.
“Employers face difficult choices when trying to control costs in a difficult business climate, while also striving to keep salary levels attractive. Companies that are successful have a clear reward strategy and an understanding of what employees are looking for.”
While South Africa is caught in a challenging economy with high interest rates and protracted load shedding affecting all businesses, many local businesses are optimistic about business prospects and are in hiring mode, according to Trollip.
Almost a third (31%) said the outlook for their business was better than projected, while 49% said it was meeting their expectations. A quarter (25%) plan to increase the overall headcount over the next 12 months, while half (51%) plan to hire for technical positions in the next 12 months, 44% will hire for IT roles and 44% want to Hire more sales people.
What does this mean for South Africans? “There are signs of optimism about business sentiment and hiring plans, particularly for certain engineering, sales and IT roles. While pay is important, there are many other factors that affect engagement and success in the workplace, and employers need to provide an engaging overall experience for employees.”
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